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Tesla Inc. shares jumped more than 8% in midday trading Monday, recouping some of their recent steep losses, and as analysts at Citi said they were optimistic about the electric-car maker’s fourth-quarter earnings and the company’s investor day in March.
The selloff, which has dragged Tesla
TSLA,
shares down 45% in the last three months, “has been driven by legitimate negative developments,” including cooling demand for Tesla cars and loss of market share in China, the Citi analysts, led by Itay Michaeli, said in a note Monday.
Tesla shares are on pace for their highest close in two weeks, and on track for the largest one-day percent increase since July 21, when they rose 9.8%.
Fourth-quarter results are unlikely to completely solve the issue, but the “weakening sentiment also reflects a lack of visibility on key go-forward items,” such as 2023 gross margins, delivery and production outlook, and the pace of product for new and refreshed vehicles, the analyst said.
Earnings day and the March 1 investor day “could provide much-needed visibility/’hand-holding’” on these questions and topics, “and that alone could conceivably provide at least a temporary sentiment boost,” Michaeli said.
Tesla has not yet officially set up a day for quarterly earnings, estimated for late this month or early February.
Analysts polled by FactSet expect the EV maker to report adjusted earnings of $1.19 a share on sales of $25.2 billion, which would compare with adjusted earnings of 85 cents a share on sales of $17.7 billion in the fourth quarter of 2022.
